Utah Ranks Number One in U.S. Tax Exemptions

In what state will you find the largest families? Utah? That’s right, 19 Utah counties make the list of the top 50 nationwide in the average number of exemptions claimed per federal tax return, according to a new Syracuse University report.

The Salt Lake Tribune reported that the Syracuse study, which is based on 2002 returns, showed Utah having more counties in the top 50 than any other state. Texas came in a distant second with 11 counties.

Not all of the exemptions that reduce the amount of tax owed are claimed by people with children, but most of them do represent larger-than-average families, which is backed up by the 2000 Census. The data showed that Utah has the largest families of any state with 3.57 people per family, compared to the national average of 3.14 people, the Tribune reported.

"Large numbers of exemptions pretty much means large families," Salt Lake City certified public accountant Gail Anger told the Tribune.

For the 2003 filing year, each exemption reduced taxable income by $3,100, the Tribune reported, meaning that for a taxpayer in the 10 percent tax bracket, that could trim the amount of federal income tax due by $310 per child. For a taxpayer in the 35 percent tax bracket, it could mean savings of $1,085 per child.

Even though the overall cost of having children far outweighs the benefits at tax time, people still take the exemptions.

CPA Anger, whose four children now are adults, told the Tribune that the income-tax breaks were never intended, of course, to fully fund the cost of raising a child. "But are they nice to have, and they do help," he said.